MCX-SX kicks off interest rate futures
Cash-settled interest rate futures started trading in MCX Stock Exchange (MCX-SX) on Monday. The IRF contract for the 10-year benchmark 8.83% 2023 bond attracted the highest volume at R150 crore ($24.4 million) with a last traded price of R101.65. The other IRF contract traded is the 7.16% 2023 bonds on Monday. The National Stock Exchange will start trading IRF contracts from Tuesday, while BSE will start trading them from January 28.
No sign of short-term R swap rates easing
Improvement in liquidity condition is unlikely to help ease short-term rupee overnight index swap (OIS) rates below 7.75%, as RBI may not slash policy rates at its upcoming meeting, says a report. A moderate improvement in liquidity will not be sufficient to push front-end swap rates below the 7.75% as the RBI is likely to hold the rates, DBS said in the report on Monday. The financial services firm sees the one-year OIS rate hovering between 7.75 and 8.25% in the medium-term. However, in the short-term, there is scope for front-end rupee OIS rates to head lower as risk premia become more compressed, it noted.